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The latest deal is likely to make the business more attractive to APA Group, which recently increased its shareholding to 19.8 per cent.

Commonwealth Bank analysts said: “APA was only ever interested in HDF due to the attractive growth properties of its cornerstone asset in Epic Energy. With SE Water sold, a takeover becomes less complex for APA."

In an interview,
Colin Atkin
, the chief operating officer of the fund, said he didn’t think the deal made the fund a bid target.

“It focuses the value that’s available," he said.

APA Group couldn’t immediately be reached for comment.

As well as for potential acquisitions, HDF is considering using the funds for capital management, organic growth at Epic and deleveraging Epic’s capital structure.

Commonwealth Bank analysts said the fund got a good price for the asset, with an implied regulated asset base multiple of 1.25 times.

Looking forward, the fund said earnings before interest, tax, depreciation and amortisation at Epic was likely to be up nine to 13 per cent against the previous year’s $89.4 million.

That growth is set to come thanks to shipping extra gas through its pipelines – in excess of that under contract, rises in inflation-linked contracts and a pipeline expansion.

The asset sale also leaves the fund, externally managed by Hastings, ripe for a restructuring, Mr Mawhinney said.

“Here you have this externally managed structure, which has a sole asset now, Epic Energy, and if ever there was a reason to internalise management or distribute Epic Energy in specie to shareholders, now is the time," he added.